A federal judge in Burlington has rejected a proposed $50 million settlement in a lawsuit by Northeast dairy farmers against the cooperative Dairy Farmers of America to settle antitrust allegations from a 2009 class-action lawsuit.

The lawsuit charged the cooperative, its marketing arm Dairy Marketing Services and Dallas-based Dean Foods with working together to monopolize the market for raw milk in the Northeast.

Dean Foods agreed to a separate $30 million settlement in 2011. The remaining defendants, Dairy Farmers of America and Dairy Marketing Services, agreed to pay $50 million, which would have worked out to an average of $4,000 each for more than 7,000 farmers, including in Vermont.

In a March 31 opinion and order Chief Federal Judge Christina Reiss denied final approval of the proposed settlement, citing among other factors the reaction of dairy farmers to the settlement.

Reiss said the court received 23 letters objecting to the proposed settlement, as well as letters from two individuals who spoke against the settlement in a fairness hearing. Reiss said the financial compensation of approximately $4,000 per dairy farm was characterized as “functionally irrelevant,” as it reflects the cost of one “tractor tire.”

Ben Brown, a partner at a Washington, D.C., law firm representing dairy farmers said he would “continue to work in the class’ best interest.”

“If that means at some point there’s a settlement that meets standards for approval the case may settle,” Brown said. “If the case does not settle then it will go to trial. We don’t know. We can’t predict the future.”

Brown also said some dairy farmers, disappointed with the outcome of the proposed settlement, want to replace his law firm as counsel. He said there would be a hearing on April 20 in Burlington to resolve that issue.

Officials with the Dairy Farmers of America also said Thursday they were disappointed with the judge’s decision and would determine their next step going forward in the case.

Contact Dan D’Ambrosio at 660-1841 or ddambrosio@freepressmedia.com. Follow him on Twitter at www.twitter.com/DanDambrosioVT. Contributing: The Associated Press.